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The Merger and Acquisition Process

My merger and acquisition process is designed to ensure that clients get a fair market price from a qualified buyer and a transaction carried out on a confidential basis. This means that the process is orchestrated to result in the receipt of multiple letters of intent, giving the client choice and negotiating power.

Accountability and transparency are built into my M&A process through verbal and written weekly progress reports. This ensures that clients always know exactly what’s going on, what they and I need to do, and how we’re going to achieve our goals. One weekly communication also keeps the time clients have to spend focused on the sale to a minimum, although they will have to gather documentation for the Confidential Information Memorandum and due diligence.

A FEW Things To Know About My M&A Process

  • When a client and I decide to work together, we become partners working toward the client’s goals. I do what’s right for the client at each stage, even if that means walking away from a deal. (That hasn’t happened yet, but if I had to advise a client to do it, I would.)
  • I take confidentiality very seriously and do not use company names outside the office.
  • If I have bad news, I’m going to deliver it. Clients need to know all the facts in order to make good decisions.

Overview Of My Staged Merger And Acquisition Process

Below is a brief overview of the process I use. If you want a more in-depth look at various aspects of the process, click on the links to go to educational pages written for advisors.

1 Getting to Know Each Other

For me, the merger and acquisition process begins well before an engagement letter is signed. I like to meet several times with a potential client and the referring advisor to get to know more about them and the business and answer their questions. This allows us to discover if we are the right fit and gives me the knowledge I need to make value enhancement suggestions and identify sector expertise to collaborate with, when required.

2 Engagement Letter

If all goes well, we get engaged, so to speak. I prepare a detailed engagement letter. It includes the services to be carried out, the fees and how/when they are to be paid, and everything else about the scope and terms of the engagement.

Once we agree on and sign the engagement letter, the work begins.

3 Get Ready

This is the stage in which my clients have to devote the most time to the M&A process. The client has two jobs[/num] begin gathering information for due diligence and provide information in written form and in interviews for the Confidential Information Memorandum (CIM). As we work together on these tasks, I also identify the best type(s) of buyer, and begin the job of searching for and qualifying buyers.

During this stage the client also implements any value enhancement suggestions.

4 Developing Material

Now the client can rest a bit while my team and I develop the Investment Opportunity Teaser and Confidential Information Memorandum. Once the content is written, the client reviews it and we make required changes before it is designed for a professional look. Buyer search and qualification is ongoing in this stage.

5 Go to Market

After extensive buyer research, I create a list of good potential buyers and review it with the client. Any buyers the client is not comfortable with are removed. Then the exciting part begins! In this stage, I deliver the teaser to qualified buyers and get those interested in seeing the CIM to sign NDAs. The CIM is delivered with instructions for when letters of intent or expressions of interest must be received. Once those are in, I schedule, prepare for, and lead management presentations and site visits.

6 Buyer Selection

If all has gone well, the client receives multiple letters of intent from interested buyers. Together, we review the offers and there may be some negotiation to meet the client’s objectives for price and terms. The client chooses the preferred buyer to work with.

7 Due Diligence

During due diligence, my role is to ensure that the buyer gets the information needed to move forward with the deal. The client should provide all information in a timely manner to keep things moving.

The client’s lawyer and seller’s lawyer will work on the definitive sales agreement during this stage. I remain available in case issues arise that the lawyers are not able to resolve. This stage ends with the deal closing.

8 Post Closing

My work is not done when the business transfers. I assist with a number of post-closing matters and may remain involved for months or years if there is an earn-out or seller financing.